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Productivity Impacts of Offshoring and Outsourcing: A Review

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  • Karsten Bjerring Olsen

Abstract

Despite the attention that offshore outsourcing currently demands in the public media, there is little empirical evidence on its economic impact. As a consequence of rising fears of job losses associated with the phenomenon, most existing research on the subject is primarily concerned with addressing related labour market issues. The impacts on productivity, however, have received only little attention. This paper surveys the empirical literature on offshore outsourcing and its productivity effects. Due to the small number of existing studies, the survey also includes research that may serve as indirect evidence of the phenomenon’s link to productivity, such as its effect on skill upgrading. The most apparent conclusion drawn from the review is that there appears to be no clear patterns as to how offshore outsourcing affects productivity, and that much depends on both sector and firm-specific characteristics. There are some indications, however, that positive productivity effects from foreign material sourcing depends on the degree to which firms are already globally engaged, but also that such engagements generally could be close to their optimum level in developed economies. There is little existing research on offshoring of services, but it appears that its productivity enhancing effects generally are small in manufacturing plants while being of a somewhat greater magnitude for firms in the services sector. Límpact des délocalisations sur la productivité : Vue d'ensemble Malgré l’intérêt que les délocalisations à l’étranger suscitent dans les médias, on dispose de peu d’éléments empiriques sur leur impact économique. Le phénomène de délocalisation faisant craindre de plus en plus des pertes d’emplois, la plupart des études qui y sont consacrées s’attachent essentiellement aux aspects qui ont trait au marché du travail, l’impact sur la productivité ne retenant guère l’attention. On commentera dans ce document les recherches empiriques sur les délocalisations à l’étranger et leur impact en termes de productivité. Vu le petit nombre d’études disponibles, on prendra également en compte les travaux qui éclairent indirectement le lien avec la productivité, notamment du point de vue de l’amélioration des qualifications. La conclusion la plus nette qui ressort de ce panorama est la suivante : il ne se dégage aucun profil clair quant à la façon dont la délocalisation à l’étranger influe sur la productivité, les caractéristiques du secteur et de l’entreprise jouant à cet égard un grand rôle. Certains éléments montrent néanmoins que l’impact positif que peut avoir la délocalisation matérielle à l’étranger est fonction du degré d’implication mondiale de l’entreprise, cette implication pouvant en général être proche de l’optimum dans les économies développées. Les recherches sont peu nombreuses sur la délocalisation des services ; il apparaît néanmoins que les gains de productivité dont la délocalisation s’accompagne dans le secteur manufacturier sont généralement faibles, alors qu’ils sont un peu plus nets dans le secteur des services.

Suggested Citation

  • Karsten Bjerring Olsen, 2006. "Productivity Impacts of Offshoring and Outsourcing: A Review," OECD Science, Technology and Industry Working Papers 2006/1, OECD Publishing.
  • Handle: RePEc:oec:stiaaa:2006/1-en
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    File URL: http://dx.doi.org/10.1787/685237388034
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